Gillibrand proposes new milk price support

Gillibrand proposes new milk price support

A gallon jug is filled with milk at Stewart's Shops dairy processing facility.

Photographer: Gazette file photo

CAPITAL REGION -- With dairy farmers across the country continuing to face low milk prices, U.S. Sen. Kirsten Gillibrand, D-N.Y., on Tuesday proposed a new price support system intended to keep farmers afloat when they would otherwise be losing money.

"This is a matter of national security and also making sure that the rural part of New York can survive," Gillibrand said in a conference call after introducing the Dairy Farm Sustainability Act. "Many farms are operating at below the cost of production, and many of our farms are on the verge of failure."

Her proposal, introduced as Congress prepares to discuss a new five-year farm bill, would set a floor price of $23.34 per hundred-weight of milk, and pay farmers 45 percent of the difference between that amount and whatever the current price is.

The price, which fluctuates monthly, is currently about $16 per hundred-weight -- a level at which most farmers are generally losing money on their milk production. Farmers have said prices have been too low for at least the last four years.

"The typical cost of production is in the $18 to $20 range, and if anybody thinks that can make a living getting paid $18, they will find out they can't for long," said David R. Wood of West Charlton, who keeps about 1,500 mature cows on his farm, which employs 25 people, and more during crop season in the spring, summer and fall.

"That would make a big difference," Wood said of the payments being proposed by Gillibrand, who is a member of the Senate Agriculture Committee.

Wood said the the basic reason for low prices is an over-supply of milk, and the support payments shouldn't be so high that they encourage farmers to produce more milk. He and other farmers blame Gov. Andrew M. Cuomo for urging the state's milk producers to expand their herds to meet a demand for Greek yogurt in 2014, contributing to what has since been a four-year slide in prices.

Low prices are perennial issue for dairy farmers across the country. The current federal law allows farmers to purchase insurance against low prices, and is widely considered to be ineffective.

Gillibrand said she wants to see the price support mechanism included in any new farm bill, though she acknowledged inclusion of the provision may be difficult, given the politics of the farm bill, which comes up for renewal every five years.

"It's harder than it should be, to be honest," she said. "It is always bipartisan, but it is dominated by commodity producers. Not a lot of states that have dairy production are on the Agriculture Committee."

According to Gillibrand's press assistant Rocio Cruz, her office is "currently working with economists to determine the range of anticipated cost to the Treasury." He also said that Gillibrand's Dairy Farm Sustainability Act will not change the price of milk at the grocery store.

A New York Farm Bureau spokesman said the organization hasn't yet had time to review Gillibrand's proposal.

"We very much appreciate the attention she is placing on dairy farming at this critical and stressful time for farmers," said spokesman Steve Ammerman. "Sen. Gillibrand's proposal is an interesting idea that we are going to review with her and her staff and get feedback on from our farmers who have been suffering from four years of low milk prices."

New York state has about 4,400 dairy farms producing $2.51 billion worth of milk each year, making New York the third-largest milk-producing state, but Gillibrand and others fear hundreds of those farms could go out of business. The state has lost thousands of farmers over the last half-century.

New York state had more than 15,000 dairy farmers as recently as 1982 and 7,800 in 1997, according to Cornell University and the U.S. Agricultural Statistics Service. The number of cows being milked as remained approximately steady, though, as about 625,000.

"Senator Gillibrand is also right that this is a national security issue," Ammerman said. "We must have the ability to feed ourselves in this country. The farm bill is a food security bill and an investment into our food system."

In Cobleskill, farmer John Radliff, who milks 40 cows, said a government program really can't fix the problem.

"If Sen. Gillibrand, the [U.S. Department of Agriculture] and this administration and any administration would stick the heck out of agriculture, it's the best thing they could do," he said. "I've been milking cows for 45 years, and I have seen so many programs come and go. They can't fix it."

He said farmers need to stop expanding their herds when prices are high, and farms should be allowed to fail in accordance with free-market principles, the same as any other busines.

"We will just repeat our past mistakes," Radliff said. "When times are good, it's 'Government stay out of our business,' and when times are bad, it's "Come help me.' You can't have it both ways."

He acknowledged farm income makes it tough to survive, and noted that his wife works. "Whether you're milking 40 cows or 400 cows, somebody has a second income somewhere," he said.